Pokémon Go Is A Trojan Horse – For The Next $150 Billion Tech Sector

Sichuan hot pots, vindaloo pork, tom yum soup, bibimbap with kimchi, cochinita pibil tacos, “suicide” Buffalo wings…

As far as spicy food goes, I’ve tried nearly all of it… and loved most of it.

My daughters, when they were young – not so much.

So, when I finally got fed up with their spice avoidance, I decided to employ some Greek military tactics.

No, not a phalanx… but the Trojan Horse.

I’d add just a tiny bit of spice into their favorite foods – a couple of red pepper flakes on a slice of pizza… a sprinkle of hot sauce into a pot of macaroni of cheese – and then upped the spice levels over a few weeks until they were actually enjoying it.

They may not have been ready for ghost peppers yet – but the problem was essentially solved.

Tech companies also use this tactic…

And right now, the biggest fad of 2016 is introducing us all to an emerging technology that’s on track to become a $150 billion-a-year business by the time this decade is over.

That fad is Pokémon Go.

And that “Trojan Horse” technology is the subject of today’s report.

I’ll show you how this technology is already making a fortune for early investors.

And I’ll point you to the company that’s best poised to take this technology and run with it.

This is no fad…

From $0 to $120 Billion in Five Years

After downloading the free app on your smartphone, Pokémon Go uses the phone’s GPS and clock to detect where and when you are and makes Pokémon characters “appear” on your phone screen all around you… in stores, in parks, in churches even. And then you can “catch” them.

In other words, the game characters are overlaid on your view of the landscape around you.

This mix of a computer graphics (the game) and the real world interacting is known as“augmented reality” (AR).

And Pokémon Go’s “Trojan Horsing” of AR is why we should be paying attention to it.

AR is a technology that embeds opaque holograms directly into the user’s field of vision with smart glasses (like the ill-fated Google Glass) or a smartphone.

If augmented reality sounds familiar, that’s because it’s related to the more well-known virtual reality (VR).

From a technical standpoint the difference is important, however. With VR, you use a headset to look literally at a “pretend world,” like a scene in which you land on Mars. Thus, the term virtual.

With AR, a mobile device or a pair of eyeglasses display data, graphics, photos, blueprints and the like on top of the real world.

Think of it this way: With VR, all you see is that “pretend world,” but you can see through and around AR.

From a financial point of view, both will be big. But AR will be the larger market because it works so well in such enterprise settings as factories, repair shops, warehouses and remote oil fields, where workers can get graphics-rich data pretty much on demand.

That’s why Digi-Capital forecasts that the overall market for AR and VR will grow into tech sector worth $150 billion a year by 2020. Of that total, AR will account for 80% of sales, or about $120 billion.

MarketsandMarkets studied the matter and came to a similar conclusion. The firm forecasts that AR will growth at 75.7% a year and be worth $117.4 billion by 2022. The study says VR will grow at a compound rate of 57.8% over the period and be worth $33.9 billion by 2022.

For proof as to how valuable AR and VR will be, just check out how well readers of my paid services are doing via these technologies.

Indeed, at my premium service Radical Technology Profits we recently took 65% gains on a VR chipmaker that we had held for less than seven months. And at my Nova-X Report newsletter, we are up roughly 70% on our remaining 50% holding in a stock (probably the “purest” play on AR out there) that we’ve held for about 11 months.

But don’t worry, those are far from the only ways you could profit from the emerging field of augmented reality.

No, Not Nintendo

As its recent tumble clearly shows, I’m not talking about Nintendo Co. Ltd. (OTC ADR: NTDOYhere.

Don’t get me wrong. I’m not in any way slighting Nintendo or the stir it has created. After all, the stats that Nintendo and its development partner – Niantic Inc. – have racked up are off the charts.

Take a look…

  • It only took 13 hours for Pokémon Go to hit the top of the U.S. mobile-app sales chart – and it’s already one of the most popular mobile apps of all time.
  • Sixty percent of those who downloaded the app are using it every day.
  • The average user spends more than 43 minutes a day playing it.
  • It’s now topping $2 million in revenue per day.
  • Nintendo which owns the Pokémon characters and a significant stake in Niantic, saw its shares shoot up more than 25% the day of the release. They rallied by a peak of 115% before heading back down sharply.

The stock’s sudden selloff came after Nintendo revealed the game won’t affect its bottom line much in the short run.

But the fact remains that Pokémon Go is the Trojan Horse of a brand-new industry that can hand tech investors outsize gains – if you know where to look.

And you should be looking at Microsoft Corp. (Nasdaq: MSFT).

Microsoft is behind what I think will be the top AR platform once it hits the market. HoloLens, a combined AR-VR headset, contains an onboard camera as well as a computer hooked up to 18 sensors that transmit a tidal wave of data every second.

Running on the Windows 10 operating system, HoloLens is packed with more computing than a laptop. It operates without wires, and the headset responds to voice, gaze and gestures.

Not only that, but the headset can focus a hologram into a room. A hologram is a 3D image created by a photographic projection.

The device is powerful enough to simulate physical places like the surface of Mars. This explains why NASA wants to use HoloLens at the agency’s Jet Propulsion Laboratory in Pasadena, Calif., to turn the Curiosity rover into a “telepresence” robot – one that can give a person a physical presence somewhere they can’t be in person… in this case Mars.

Though HoloLens is not yet for sale to the public, it’s getting a lot of attention within tech circles – and it looks likely to be VR/AR’s true breakout product.

Microsoft’s focus on AR comes at a great time. The firm just turned in an overall strong earnings report for its fiscal fourth quarter in which it beat expectations for both sales and profit.

Microsoft more than doubled sales of recurring cloud computing sales, boosting the segment that contains its Azure-branded cloud services to $6.7 billion, a 9.6% year-over-year jump before taking into account the impact of the strong U.S. dollar.

Over the past year, Microsoft shares are up 23.6%, compared to a breaking-even Nasdaq Composite Index – and it’s up 9.67% since I suggested you pick up some more shares at a discount during April’s “earnings recession.”

And that sort of growth shows no signs of slowing down as Team Nadella continues to add on to its robust software offerings – with to the cloud… and now the augmented reality that Pokémon Gois demonstrating the possibilities of.

Disclosure: None.

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